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SHANGHAI - Chinese stocks fell to a three-month low on Tuesday and Hong Kong shares also declined, as concerns over a slowdown in China's economy and escalating tensions in the Middle East weighed on sentiment.
** Risk appetite was also curbed by the mega IPO of Chinese memory chipmaking giant Changxin Memory Technologies (CXMT), despite solid June trade data.
** China’s large-cap index CSI300 was down 0.4% by the lunch break, while the Shanghai Composite Index dropped 0.7%, both hitting their lowest levels since early April.
** In Hong Kong, the benchmark Hang Seng Index retreated 0.5%.
** China is due to release second-quarter GDP data on Wednesday that is expected to show economic growth slowed to 4.5% in the second quarter from 5% in January-March, according to a Reuters poll.
** Sentiment was also dampened by renewed tensions in the Middle East, as the U.S. military carried out more strikes against Iran on Monday with President Donald Trump reinstating a blockade of Iranian shipping.
** "Geopolitical uncertainty roiled market mood and expectations of global liquidity," Guotai Haitong Securities said in a note. "Fluctuations of risky assets will likely increase."
** Also adding pressure to domestic market liquidity, China's top memory chipmaker CXMT starts book-building on Wednesday to raise 29.5 billion yuan ($4.35 billion). The company is scheduled to list on July 27, according to sources.
** Chipmakers, big data and computer stocks slumped in China as investors prepared to subscribe to CXMT’s new shares.
** Artificial intelligence-related shares also dropped as surging volatility in Korean chipmakers rekindled fears of an AI-driven market bubble.
** In contrast, energy stocks jumped as renewed fighting in the Middle East boosted oil prices.
** In Hong Kong, energy and shipping stocks rose, while AI stocks tumbled. ($1 = 6.7817 Chinese yuan renminbi)
(Reporting by Shanghai Newsroom; Editing by Sonia Cheema)





















